Trucking and Intermodal Industry: Guiding Demand and

The trucking industry has seen a complex interplay between demand and capacity dynamics in recent months. A recent FreightWaves article noted that declining truckload demand masks freight capacity exiting the market, in part due to seasonality. Although the National Outbound Bid Volume Index (OTVI), SONAR’s primary measure of bid volume, fell 2% year-on-year, bid rejection rates and spot rates increased, indicating a capacity-driven tightening trend. Analysts expect these rates could rise further as demand strengthens during the traditionally busy months starting in March.

Also read: Cargo volumes plummet in December, trigger rates rise

At the same time, the intermodal industry experienced one of its strongest years on record. Data from the Association of American Railroads confirms that 2024 is the third strongest year in history for intermodal traffic, with December 2024 recording the highest December intermodal traffic on record. This growth was primarily driven by strong consumer spending and import activity, as shippers utilized intermodal solutions despite challenges with rail service quality. Transpacific shipping dynamics have exacerbated this shift, with carriers such as Chinese operator COSCO benefiting from strategic route decisions such as avoiding the Red Sea and taking advantage of increased route efficiencies and resulting profit gains.

In the less-than-truckload (LTL) carrier market, Roadrunner has followed suit with industry peers, announcing a 6.9% general rate increase (GRI), the first increase since 2021. Including ABF Freight, FedEx Freight, Saia and Old Dominion Freight Lines indicate a broader trend of cost adjustments across the industry.

In the consumer packaged goods (CPG) sector, manufacturers face new challenges as they seek growth beyond price increases. Increased use of GLP-1 drugs has been shown to impact purchasing behavior, such as a 5.5% reduction in grocery spending, creating an additional hurdle for brands aiming to expand sales, particularly in indulgence categories. Goldman Sachs predicts that GLP-1 use will cover 13% of the U.S. population within five years, and the consumer goods industry is focusing on innovative strategies to maintain growth as consumer behavior changes.

Source: IndexBox Market Intelligence Platform